Still another result of the work of these pirates was the establishment of two remarkable communities, one in Texas and the other in Florida, both of which territories were then under the Spanish crown. Both settlements were made to provide a market for the goods which these cruisers captured; for after the decision of the courts noted above, the prizes could be no longer sent to the United States.

The Texas community was established by Jean Lafitte, who had had much experience as a smuggler at Barataria Bay, Louisiana, both before and during the War of 1812. He had also made several cruises on pirate ships—enough to learn that more money could be made buying prizes from the cruisers than in cruising.

Lafitte went to the island where the thriving city of Galveston now stands, late in 1816, and found there a number of shanties which had been built by one Luis de Aury, a pirate who had intended to establish such a nautical "fence" as Lafitte had in mind. But Aury thought the distance from the United States too great, and left the place to Lafitte, who at once sent word to all the ports of the warm seas that he was at the head of "an asylum to the armed vessels of the party of independence." The asylum included facilities for repairing vessels, stores for the sale of supplies, and numerous taverns and other places of resort for the crews. In short, a town—seaport—was built there by capitalists and mechanics, but all paid tribute to Lafitte. As at Barataria, slave-ships were more highly prized than any others because of the ease with which the "goods" could be smuggled into the United States. When General James Long, a noted Texas filibuster, visited the settlement, he found that "doubloons were as plentiful as biscuit," while the harbor was strewn with the wrecks of prizes.

After a time Lafitte went through with the forms of organizing the "Republic of Texas," and elected a governor, who appointed a justice to preside over the court of admiralty that the constitution of the "Republic" had provided. Then cruisers were commissioned and prizes were condemned, but when these condemned prizes were sent to New Orleans, they were seized by the United States authorities, and some of the pirate crews were hanged. Nevertheless, it was not until 1821—after nearly five years of unmolested prosperity—that Lafitte was driven away, and even then he was allowed to carry away all of his portable plunder. To add to the interest of the story, when Lafitte left the island he disappeared forever. Rumor said he was seen in Mexico, and in the thick of a fight at sea, and in France, but the truth is that he had gone to the port of missing ships. When the Luis de Aury mentioned above left Galveston Island, he cruised around for a while, and then, on September 2, 1817, landed on Amelia Island, Florida, where Fernandina now stands. A Scotch adventurer named MacGregor had been trying to build a town there and organize the "Republic of the Two Floridas," but without success. He sailed away when Aury came, and Aury continued the work of nation-building, combined with smuggling goods captured by "the party of independence." He thought the location admirable because of the proximity to the United States, but he soon learned that the convenience due to distance was more than counterbalanced by the attention attracted. Many speculators came to the camp and bought his goods, but the customs officials pressed them closely. Moreover, while Aury supplied the planters with cheap slaves, he was so short-sighted as to encourage Georgia slaves to leave their masters to join his forces. The Georgia planters who suffered losses in this way had no difficulty in persuading the Washington authorities to invade Spanish Florida and drive the pirate away—December 23, 1817. But Aury, like Lafitte, was allowed to carry away his plunder.

The effect of the piracies upon American commerce can be traced in the annual reports of exports and imports. Thus the exports of American products to the Spanish West Indies amounted to $3,606,588 in the fiscal year 1816-1817, while American exports of foreign goods to the same ports reached the sum of $3,477,511. The corresponding figures for 1819-1820 were $3,439,365 of American products and $2,545,717 of American exports of foreign goods. American tonnage fell off, also, of course. The common saying that there is no friendship in business is untrue. American commerce and the use of American ships were increasing in that period at an astonishing rate in all other trades, but Spanish resentment produced a "boycott" that is shown by the official returns.

But this boycott was the mildest form of expression of Spanish resentment. Within a short time after the American-owned cruisers under the Spanish-American flags began ravaging Spanish commerce, the Spaniards retaliated by making reprisals after the fashion common in the sixteenth century. Encouraged by the island authorities, the ship-owners of Cuba fitted out armed vessels to prey upon American commerce. The Cuban pirates were in no case commissioned, but the Porto Rico authorities gave commissions to half a dozen or more. The Cuban pirates, however, worked openly. Regla, a village on the east side of Havana Bay, was the chief pirate port. In November, 1821, eleven Spanish pirate vessels were cruising between Cape Maisi and Santiago, five were working as a squadron at Cape San Antonio, and at least five more were cruising on the north coast east of Matanzas. Between Havana and Matanzas was a flotilla of small boats the crews of which kept constant watch for vessels becalmed in the offing. All such vessels were attacked as soon as night came. Another gang of small-boat pirates operated at Cape Cruz, where they lived in the caves for which the region is noted.

The extent of the depredations of these pirates was never completely known, of course, but in Niles's Register of May 24, 1823, it is stated that 3002 piratical assaults had been committed upon merchant ships in the West Indies since the War of 1812. The "Naval Affairs" volumes of the American State Papers contain many accounts of such assaults, and it appears from these that the pirates not infrequently tortured captured sailors. In March, 1823, the captain and two men of the brig Alert, of Portsmouth, New Hampshire, were killed in the mouth of Havana harbor. The captain of the brig Bellisaurius, captured near Cape San Antonio, had his arms cut off, after which he was placed on a bed of oakum and burned to death.

The markets of Cuba were frequently flooded with merchandise taken by the pirates, and a number of schooners plied between Cape San Antonio and Regla to carry supplies to the pirate flotilla at work there and bring back captured goods.

The efforts of the Washington authorities to deal with the situation created by the American-owned pirate ships were, as noted, hampered at first by public sympathy for the Spanish-American insurgents. Even after the Spaniards began making reprisals, nothing effective was done until May 15, 1820, when Congress provided for the building of five swift war schooners, a force that was by no means sufficient to cope with the evil. Other ships of the navy were ordered to the region, and these were still further reënforced with a flotilla of small schooners bought in Chesapeake Bay. A number of huge rowboats were built to destroy the pirates operating in small boats near Havana, but the depredations continued; the aid of the Cuban authorities was sufficient to keep the pirates at work. It was not until the independence of the Spanish-American republics was acknowledged, and the Spanish-American privateers thereby lost their commissions, that piracy came to an end in the West Indies.

The last American vessel to suffer at their hands was the Mexico, Captain John G. Butman, of Salem. She sailed from home with $20,000 in coin, for Rio Janeiro, on August 29, 1832. On September 20 she was captured by the schooner Panda, Captain Pedro Gibert, of Havana. After taking out the coin, Gibert fastened the crew in the forecastle and set the Mexico on fire; but the crew released themselves in time to put out the fire. The Panda was captured later on the coast of Africa, a number of the pirates were sent to Salem for trial, and Pedro Gibert and four others were hanged. It is an interesting fact that two members of the Mexico's crew lived until 1905 and one until 1908. Life at sea agreed well with the New Englanders.